Facebook was born and run from a Harvard fresher’s dormitory. In its earliest days Amazon operated as a bookstore out of Jeff Bezos’s garage.
Like a growing number of today’s most successful businesses, little is needed to financially launch them. This is particularly true of recruitment agencies whose primary focus lies in building relationships and networks.
A phone, internet line, and a registered limited company for £13 are the bare essentials to getting your agency off the ground.
Once up and running you can then focus on securing:
- A website (including a live jobs feature)
- An email account
- Finance for contract recruitment
- Advertising on the relevant job boards
- A CRM
- Insurance for contract recruitment (professional indemnity, public liability, employee liability)
- Contracts to send to contractors and clients (terms & conditions)
These vary in their price and the time they consume, especially if you undertake the task of designing your own website or CRM. That said, they are by no means the barriers to starting an agency they may have once been.
The financial reality of running an agency actually focuses on how much your fixed outgoings are – your rent, bills, salaries and living costs – and what the absence of a regular income will mean as you grow your agency.
One of the biggest risks to contract recruitment agencies, is that they overextend themselves as they grow and end up falling foul to their own cash flow problems.
In contract recruitment there’s a shortfall between paying your contractors regularly and receiving payment at a later date from your client’s invoices. This gap grows wider with every contractor you place. That is unless you have a good invoice factoring provider behind you.
A good provider will bridge this gap by supplying you with your profit quickly and in full, so you have the capital to hand to accompany your growth.
With a rise in remote working and cloud based software, the barriers to starting-up have been almost entirely removed.